Latest / Early Edition with Ryan Bridge / Kelly Eckhold: Westpac Chief Economist on Australia's new federal budget

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Kelly Eckhold: Westpac Chief Economist on Australia's new federal budget · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Jim Chalmer's fifth budget across the ditch, seventy seven billion
• 0:03
  Speaker 1: dollars in net new taxes. Deficit stays by the way
• 0:06
  Speaker 1: until twenty thirty five.
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  Speaker 2: This is the most important and ambitious budget in decades.
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  Speaker 2: Important because the world is throwing a lot of us
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  Speaker 2: and this budget is about helping Australia deal with those challenges.
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  Speaker 2: And ambitious because we have so much going for us
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  Speaker 2: and this budget is about Australia seizing those opportunities.
• 0:26
  Speaker 1: You're Rossie Batler's your work is five dollars a week
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  Speaker 1: tax cut for you, negative gearing, capital gains, tax breaks
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  Speaker 1: scaled back for your investors and property owners. Kelly, you're
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  Speaker 1: Cold Westpac chief economist with US Line this morning. Kelly,
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  Speaker 1: good morning, Good morning.
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  Speaker 3: Your thoughts well, I mean, I think for the financial
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  Speaker 3: markets this was a bit of a wash because probably
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  Speaker 3: the amount of debt hitting the market is not very
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  Speaker 3: much different than they expected. But it certainly is a
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  Speaker 3: reasonably expansionary budget on net. And if I look at
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  Speaker 3: what Lucy Ellis, my boss in Australia saying, is this
• 1:01
  Speaker 3: issue of a bit of a tailor two horizons there
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  Speaker 3: where I mean at the starting point for that Aussie economy,
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  Speaker 3: it's been doing well. That's why the RBA has been
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  Speaker 3: tightening this year, so the government's seen a bit of
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  Speaker 3: revenue from that, so that's good, But then they are
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  Speaker 3: spending more money and all of the savings measures that
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  Speaker 3: are designed to pay for all of this are backloaded
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  Speaker 3: because it's going to take a week while before things
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  Speaker 3: like capital gains taxes, etc. Start to add to the coffers.
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  Speaker 3: So there's quite a lot of risky, particularly since most
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  Speaker 3: of those initiatives have to go through legislation. And my
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  Speaker 3: understanding is that some of those oppositions, some of those
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  Speaker 3: other coalition parties, are not supporting some of these things,
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  Speaker 3: So they might be spending a bit of money now,
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  Speaker 3: but they might not get the savings later.
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  Speaker 1: Plus you've got the thirty six billion I think they
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  Speaker 1: want to cut from the disability insurance scheme. All these things,
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  Speaker 1: as you say, are going to take time to happen
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  Speaker 1: and are not even guaranteed to happen.
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  Speaker 3: That was my point. Yeah, particularly on that the savings scheme.
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  Speaker 3: I mean, I think it's their equivalent basic seed, and
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  Speaker 3: know how challenging it is to start cutting that. The
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  Speaker 3: other thing I'll say is that the assumptions, the economic
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  Speaker 3: assumptions are here are quite a bit more rosy than
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  Speaker 3: my colleagues in Australia have in terms of, for example,
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  Speaker 3: where unemployment's going to peak, they say it's only going
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  Speaker 3: to peak at four and a half percent. I would
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  Speaker 3: have thought that's pretty fanciful in the current environment.
• 2:21
  Speaker 1: Kelly are called a book very quickly before you go property.
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  Speaker 1: They are, you know, scaling back negative gearing that are
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  Speaker 1: doing the tax changes to property investors, and yet the
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  Speaker 1: Treasury's own estimates say it's going to result in fewer
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  Speaker 1: houses being built there.
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  Speaker 3: Yeah, well, I guess everybody's got a view when they
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  Speaker 3: when they kind of like model these these things through.
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  Speaker 3: I mean, obviously the increase it's as less positive environment
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  Speaker 3: for investors, isn't it. So I think ordinarily you might
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  Speaker 3: expect the be some supply implications of there.
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  Speaker 1: Kelly are called Westpact. For more from early edition with
• 2:58
  Speaker 1: Ryan Bridge, listen line to News Talks it'd be from
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  Speaker 1: five am weekdays, or follow the podcast on iHeartRadio.